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Benefits of
Malta
The Republic of Malta is an archipelago
consisting of three Islands – Malta, Gozo and Comino. The
Maltese Islands are situated in the middle of the Mediterranean
Sea, about one hundred kilometres south of Italy.
The population of the Islands is
approximately 360,000. Maltese society is homogeneous, having
its own identity and language. Malta is a democratic republic
based on respect for the fundamental rights of freedom of the
individual.
The official language of Malta is the
Maltese language. English is spoken practically by every Maltese
citizen, and a good percentage of the population commands good
knowledge of other European languages, mainly Italian, French
and German.
The unit of currency is the Maltese Lira,
which is equivalent to approximately US $2,65. The Civil Law is
derived from Roman Law with many Common Law influences. The
Principal Corporate Legislation is the Commercial Partnerships
Ordinance 1962 (Cap. 186), the Malta Financial Services Act 1988
and the Companies Act 1995.
The types of company for international
trade and investment are the Offshore General Trading Companies
and the Offshore Non-Trading Companies.
Other
Benefits of
Malta
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Malta has
invested in one of the Europe’s most advanced
telecommunication systems, including a full satellite direct
dialling system connecting Malta with most parts of the
World. |
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A new air terminal building has been
recently erected to ensure comfort and efficiency. |
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Offshore Companies are not subject to any
Foreign Exchange Control legislation. |
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Offshore Non-Trading Companies are taxed
at zero percent. |
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A Maltese Company has the same powers as
a natural person. |
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Confidentiality is strictly safeguarded
in Malta. |
Questions and
Answers
regarding
Companies in
Malta
A. The
Structure of a Company.
1. Procedure to Incorporate.
By submission of the proposed Company’s
Memorandum and Articles of Association and the Government fee to
the Malta Financial Services Centre, together with a business
plan (for General Trading Companies) and original bank reference
relating to the beneficial owners.
2. Authorized and Issued Capital.
It is normal to incorporate a company with
an authorised share capital of between 2,000 and 5,000 Maltese
Lira, this being the maximum authorised capital for the minimum
duty. The issued and paid up capital may not be less than 500
Maltese Lira, approximately US $1,500. The share capital must be
expressed in Maltese Lira.
3. Which classes of Shares are permitted?
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Registered
Shares. |
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Preference
Shares. |
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Redeemable
Shares. |
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Shares with or
without voting rights. |
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Bearer Shares
are not permitted for Private Limited Companies. |
B. Provisions
in the Act relating to the Management and Administration of the
Company.
1. Directors.
The minimum number of directors is one.
The directors must be natural persons. They may be of any
nationality and need not be resident in Malta.
2. Shareholders.
The minimum number of shareholders is two.
But with effect from 1st January 1996, single member companies
could be incorporated.
3. Company Secretary.
A Maltese Company is required to appoint a
company secretary who must be a licensed Maltese Nominee Company
unless the Company has such a Nominee Company holding office as
a director in which the secretary may be non-resident.
4. Financial Statement Requirements.
A Company is required by law to maintain
financial statements and submit them annually to the Malta
Financial Services Centre.
5. Taxation.
Malta’s tax framework and double tax
treaties provide opportunities for efficient tax planning
through the use of investment holding companies, investment
schemes and other vehicles.
Resident Companies pay tax of 35% of net
chargeable profits. Offshore General Trading Companies pay 5% of
net chargeable profits but this type of company may waive this
benefit and select another rate of tax in agreement with the
Malta Financial Services Centre. Offshore Non-Trading Companies
are taxed at zero percent.
“Resident” Trading & Holding Companies
There are 2 types of Maltese company which
are treated as Fiscally Resident in Malta, being:
- MALTA INTERNATIONAL TRADING COMPANY (MITC).
These companies are trading companies which are resident in
Malta for tax purposes but cannot make any business in Malta
or with Maltese residents. All business must be carried on
outside Malta.
The company must pay tax at the regular Malta corporation
tax rate of 35%, but will receive a refund of 30.8% of
taxes paid. Therefore the effective tax rate is 4.2% for
MITC companies.
- MALTA INTERNATIONAL HOLDING COMPANIES (MIHC)
These companies are holding companies which are resident
in Malta for tax purposes but can only hold assets and/or
receive income from assets which are outside Malta. MIHC’s can
hold any type of asset, such as shares, royalty rights,
properties, equity in other companies, as long as these assets
are held outside Malta.
These companies must pay tax in Malta at reduced rates of
between 15% to 19% based on the audited profits of
the company, depending on the particular activity of a company
(i.e. property holding, holding of shares, ect.). The company
will receive a refund from the Malta tax authorities of up to
100% of all taxes paid. To get a refund of all taxes paid,
the company must satisfy one or more of the following criteria:
2a. It must hold 10% of the equity shares (i.e.
Non-preference ownership shares) of a company outside Malta.
2b. It must hold any type of shares worth US$1.5 Million
or over.
2c. It must control the voting shares/rights of another
company.
2d. It must control other companies in furtherance of
“specific business objectives” (i.e. the development of a group
of associated companies).
Notes
(1) For a copy of a full set of documents
to be made apostille in the jurisdiction will cost a minimum US
$
We are not responsible for any forthcoming
changes concerning the rules and regulations of the
jurisdiction.
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